Are the barons of high-technology industries a threat to free markets? Some of the world’s antitrust authorities fear that they are. In both America and Europe they look warily at new ventures by giant telecoms firms. In Europe, there are worries that a handful of companies could eventually dominate digital television, once it starts to develop. And America’s Department of Justice frets most about the best-known computer baron of them all: Bill Gates.
Simple statistics can make the case against Microsoft, the computer-software firm of which Mr Gates is the chairman. Over 80% of the world’s personal computers contain Microsoft’s MS-DOS or Windows operating systems; and Microsoft is by far the biggest supplier of desktop software applications.
But these facts mean little. Trustbusters’ fears should be based not merely on the idea that Big is Bad, but on the economics of the industry in question. Moreover, as in any other business where they are worried that consumers might be fleeced, regulators should step in only if they can do better than market forces at keeping powerful companies in check. In nearly all industries (the notable exceptions include utilities, such as gas and water supply), they cannot.
So why might antitrust authorities be especially nervous about high-technology markets? Economic theory suggests several good reasons:
Networks. One possible cause of market failure is that many information-age industries serve their customers via different kinds of networks. These links may be physical - eg, telecommunications systems or computer networks - or they may be more loosely defined, consisting of the users of, say, a particular piece of computer software. Networks bias industries towards monopoly, or at least oligopoly, because on the demand side they are subject to economies of scale: the value placed on membership by a consumer rises with the number of other people on the network.
Systems. Computer software, television decoders and other products of the information age are not used in isolation. They are bits of “systems”, in which one particular component cannot be used without another. There is little point in buying a personal computer without an operating system; and operating systems are useless without applications, such as word-processing programs, databases and spreadsheets.
This may mean that if a firm controls one part of the system, it can lever its way into others - so spreading its monopoly. Microsoft’s critics say that it could, for instance, use profits from the operating-system market to subsidise applications programs. And by embedding programs for free in its operating system, it could remove any incentive for customers to pay extra for rivals’ programs.
Standards. Networks and systems need common standards: without them, network users cannot communicate with one another, and one part of a system might not be compatible with the next. But while standards make industries run more efficiently, they may also have drawbacks of their own.
One is that if a firm creates an industry standard, it can wield enormous market power. Since individual consumers and other firms need to invest time and money in acquiring skills specific to the industry standard (eg, learning how to use Microsoft Windows), they get “locked in”. As switching systems means learning new skills, would-be entrants face a considerable entry barrier.
Another potential drawback, say some economists, is that big companies can use their market power to ensure that their way of doing things becomes the standard - and, in consequence, make themselves more powerful still. There is no guarantee that the standard they impose will be the most efficient.
Innovation. Computing, telecoms and the media have all seen rapid technological change. A stream of new ideas and products has sustained vigorous competition in most areas of these industries, driving costs and prices down. Thus, even if the product market were monopolised, trustbusters could afford to be sanguine if producers of new ideas were still able to make their way to market, or at least to force dominant companies to keep innovating and cutting prices themselves. But if such innovations also became monopolised, antitrust authorities would be right to worry.
Even if any of these worries are justified, there may still not be a good case for antitrust authorities to wade in. The existence of economies of scale in networks, for example, does not mean that monopoly is inevitable: several networks can coexist. If costs are cut in the process, and if the threat of new competition is maintained, consumers will enjoy lower prices.
Jumpy antitrust authorities may try to pre-empt anti-competitive behaviour by framing rules of entry into infant markets. That is more likely to work in mature monopolistic industries, such as utilities, where technological change is slow and trends fairly predictable. The speed of change in high-tech industries has consistently wrong-footed trustbusters. For the time being at least, it may be more sensible to trust the market.
VOCABULARY
| 1. antitrust | антитрастовый |
| 2. venture | рискованное начинание, коммерческое предложение, предприятие высокотехнологической отрасли |
| 3. telecoms firm | фирмы телекоммуникационной связи |
| 4. trustbuster (s) | сторонники антитрастовых мер |
| 5. utilities | коммунальные службы (услуги) |
| 6. oligopoly | олигополия (доминирование на рынке небольшого числа крупных фирм) |
| 7. innovations | новшества; новые изобретения; инновации |
| 8. infant markets | зарождающиеся, новые рынки |
2. Напишите аннотацию данного текста.
«Business and Businesses»
Topics for discussion
1. Multinational corporations are at the heart of the debate over the merits and faults of global economic integration.
2. Multinationals and global investment.
3. Multinationals and developing countries.
4. Vertical integration as a factor for the growth in multinationals.
5. Small business - the core of national economies.
6. The leaders of high-technology industries pose a threat to free markets.
UNIT VII. MANAGEMENT. MARKETING.
1. Дайте ответы на следующие 1. What is management ?
вопросы без предварительного 2. Are there any ready-made techniques
чтения текста: for perfect management ?
2. Дайте ответы на следующие 1. What are management fads ?
вопросы после после беглого 2. What is called «instant coffee»
просмотра текста: management ?
3. What is «critical thinking» ?
3. Прочитайте следующий текст и найдите ключевые слова и предложения в каждом абзаце:
INSTANT COFFEE AS MANAGEMENT THEORY.
For success in the $20-billion-a-year management-consultancy business, find a fad. In recent years total quality, culture change, core competences, organisational flattening, benchmarking, outsourcing and downsizing have all been touted as the sole path to corporate salvation. For a taste, take Michael Hammer and James Champy in their best-selling book, “Re-engineering the Corporation” (HarperBusiness, 1994): corporate America’s alternative to re-engineering, they say, is “to close its doors and go out of business. The choice is that simple and that stark.” Is management really so easy?
For all the hype, fad-based management usually fails to deliver. Quality programmes are launched with great fanfare, then fade away: Florida Power & Light, an electricity company, at one time boasted an 85-person quality department and 1,900 quality teams, but saw little improvement in its services. Cutting management layers often disrupts internal communications, as firms such as Nynex and Sears, Roebuck have discovered. Many companies - among them Compaq and Harley-Davidson - have found outsourcing so hard to manage that some previously subcontracted production is now back in-house. And, according to the American Management Association, fewer than half of the firms that have downsized since 1990 have seen long-term improvements in quality, profitability or productivity.
Some economists argue that every fad leads managers down one or more of several “false trails”. These include believing that ready-made techniques can solve any problem; taking action, any action (the “ready, fire, aim” stance); flattening every structure in sight; and constructing corporate cultures based on happy families, not hierarchies.
They concede that these trails lead to some useful ideas. The snag, however, is that managers tend to take their usefulness on trust. This has spawned what is called “instant coffee” management: just open the jar and add water, no effort required. Worse, any manager who fails to follow the latest fad - regardless of its relevance - risks being thought unprofessional. Faddishly following the false trails is damaging to “the sophisticated formal organisation and decision systems that corporations have evolved and which make management effective.” Companies are damaged in other ways, too. Management gurus encourage firms to believe that all fixes are not just easy to implement but quick to take effect: quality programmes will produce rapid declines in defect rates; re-engineering will swiftly revitalise paralysed processes; making use of subcontractors will instantly clear clogged production lines. So managers take on too many fads at once, causing “an overdose of instant remedies” When the promised benefits fail to appear, managers lose heart - which is why most re-engineering and quality initiatives eventually break down.
The allure of fads undermines rational management and thinking at every level of the corporation. In the early 1990s Chrysler’s Jeep division found that sun visors on some of its vehicles were splitting after sale. The team behind the visors took a fashionable tack: they set about re-engineering the entire product, along with the processes used to make it. Robert Lutz, Chrysler’s president, suggested that the team instead try to discover the specific cause of the defect. Only then did they find that a supplier’s worn tool was to blame - a glitch that was easily fixed without extensive re-engineering.
As with sun visors, so with entire firms. A better approach is a return to what is called “professional management” But it is less clear about what this entails, apart from years of experience, lofty ideals and ethics, and the ability to use “sound reasoning” to assess the ideas behind the fads.
The trouble with ready-made one-size-fits-all management techniques is that they encourage “the outsourcing of critical thought”. Fads lead managers to believe that simple initiatives offer simple answers to the problems of the complex, inter-related system at the heart of the modern company. In reality, such an approach will probably have an unexpected - and often unwelcome - impact on many different aspects of the company’s operetions. Since firms also exist as part of a network of suppliers, patners and customers, the potential for chaos is vast.
What clever managers have in common is their ability to think about their companies in the way Mr Lutz thought about sun visors: appraise every situation individually, indentify the problems involved and the decisions that must be taken, then analyse the potential drawbacks or opportunities.
Thinking management, is the approach of some of the most successful companies of recent decades, such as Wal-Mart, Sony, Hewlett-Packard and Johnson & Johnson. These firms understand that there is no competitive advantage to be gained simply by adopting the same fad or strategy as your competitors. Instead, they have consistently outclassed the “critical thinking skills” of their rivals in everything from product development to distribution and marketing - all with barely a fad in sight. It has to be asked: could fadless management be the next management fad?
VOCABULARY
| 1. total quality (TQM-total quality Management) | общее управление качеством |
| 2. fad | зд. новомодная идея, способная с наибольшей эффективностью усовершенствовать управление деятельностью компании; готовый «рецепт»; «стандартный рецепт» по улучшению деятельности компании |
| 3. management-consultancy business | бизнес по предоставлению консультационных услуг в области менеджмента |
| 4. culture change | зд. изменение корпоративной «культуры» (подхода к ведению бизнеса) |
| 5. core-competences | основной вид деятельности производства |
| 6. organisational flatenning | компактность управленческой структуры |
| 7. benchmarking | 1.определение исходных (основных) ориентиров, конъюнктурные обзоры 2. копирование известных тогровых марок; «следование за лидером»; выбор товарных эталонов |
| 8. outsourcing | привлечение субпоставщиков |
| 9. downsizing | достижение оптимального числа (сокращении) управленческого персонала |
| 10. re-engineering | реорганизация и совершенствование процесса деятельности |
| 11. in-house production | собственное производство (без привлечения субпоставщиков) |
| 12. American Management Association | Американская ассоциация менеджмента |
| 13. ready-made techniques | готовые средства (методы, приемы) |
| 14. quality programmes | программы по повышению качества |
| 15. defect rate(s) | уровень брака в производстве |
| 16. «the outsourcing of critical thought» | зд. использовать чужие идеи по изменению (улучшению) корпоративной деятельности |
| 17. to outclass | оставить далеко позади, превзойти |
| 18. product development | разработка, совершенствование изделий |
| 19. distribution | распределение, сбыт |
| 20. marketing | маркетинг |
4. Переведите данный текст.
5. Напишите реферат и аннотацию данного текста.
Text B.
1. Переведите следующий текст: